Over £1.2bn was stolen by criminals through authorised and unauthorised fraud in 2022, equivalent to over £2,300 every minute, according to UK Finance in its Annual Fraud Report released today (11 May) detailing the amount of money stolen by criminals through financial fraud in 2022.
78% of APP fraud cases start online and 18% start via telecommunications, the
The banking and finance industry prevented a further £1.2bn of unauthorised fraud from getting into the hands of criminals.
The figure of over £1.2bn stolen through fraud in 2022 was a reduction of 8% on 2021, while the number of fraud cases across the UK was down 4% to almost three million cases.
Unauthorised fraud
Within the total figure, unauthorised fraud losses across payment cards, remote banking and cheques reached £726.9 million in 2022, a decrease of less than one per cent compared to 2021.
Remote purchase fraud, where a criminal uses stolen card details to buy something online, over the phone or through mail order, remains the biggest category of losses at £395.7m - although this figure was again down on the previous year.
Fraud on lost and stolen cards increased by 30% to £100.2m and card ID theft, where a criminal opens or takes over a card account in someone else's name, almost doubled to £51.7m. Victims of unauthorised fraud cases such as these are legally protected against losses.
Authorised fraud
Authorised push payment (APP) fraud losses reached £485.2 m, down 17% compared to 2021. Within this, 57% of all reported cases related to purchase fraud, with case volumes breaking 100,000 for the first time. Investment fraud continued to be one of the largest proportion of APP losses (24%), although there was a 34% reduction compared with 2021. Overall, the amount of APP fraud losses reimbursed increased by 5% in 2022 compared to the previous year.
Fraud origination
The banking and finance industry spends billions of pounds each year fighting fraud and economic crime. However, the majority of fraud originates outside the banking sector and UK Finance has conducted analysis on over 59,000 APP fraud cases to show the sources of fraud.
The analysis showed that 78% of APP fraud cases originated online - these tend to include lower-value fraud such as purchase fraud and therefore account for 36% of losses. Social media platforms account for the greatest number of online fraud cases - around three quarters of online fraud starts on social media.
Meanwhile, 18% of fraud cases originate via telecommunications - these are usually higher value cases, such as impersonation fraud, and account for 44% of losses.
Given so much fraud is initiated from criminal activity taking place through online platforms and telecommunications, UK Finance and its members have long called for far greater cross-sector action to tackle the problem at source.
David Postings, chief executive at UK Finance, said: "Fraud has a devastating impact on victims and over £1.2 billion was stolen by criminals last year. The banking and finance sector is at the forefront of efforts to tackle this criminal activity. The sector spends billions on detection and prevention and also refunds people who have fallen victim, even if the fraud originated outside the banking system.
"Our data also makes clear just how much fraud emanates from online platforms and through telecommunications. The government's new fraud strategy rightly says we need to focus on stopping it at source and that these other sectors need to do far more to tackle the problem they are facilitating.
Daniel Holmes - Fraud Prevention SME - Feedzai said: "Feedzai is proud to partner with UK Finance to deliver its Annual Fraud Report 2023. We are able to see some positive signs such as overall fraud losses coming down, but rapid changes in technology bring us to a new and critical inflection point in the fraud space.
"The risks remain elevated as fraudsters adapt and use increasingly sophisticated tactics and technology to fool consumers. This report highlights the importance for banks to maintain their focus on combining the latest anti-fraud technology with an approach that puts consumer education at the core. We also need a broad coalition of effort from beyond financial services to tackle fraud. This combination will give us the best chance possible to stop fraud at its source, and minimise the impact on consumers.
Responding to the report Mary Young, civil fraud partner at international law firm Kingsley Napley said: "Despite a headline decrease in fraud losses for 2022 compared to the previous year, we know that investment scams, identity fraud and frauds that trick people into handing over access to their financial accounts remains a huge problem.
"Financial fraud affects those with tight finances right through to sophisticated finance professionals; couples buying their first house through to crypto traders. The sums lost can be modest but can also stretch to sizeable amounts.
"The stand out area of increase according to today's figures seems to be Card ID Theft which has increased by 105% in terms of numbers of cases, and 97% by value, with the largest increase being circumstances in which a genuine card account is taken over by a fraudster. This means that genuine information about card numbers, expiry dates and also postcodes and addresses have been compromised. This may be as a result of phishing, scam text messages or good old fashioned mail theft which reminds us that the need for vigilance applies in all aspects of life, both on and off-line.
"The Government recently announced a new Fraud strategy to crack down on those using technology to commit fraud and promised greater resources to investigate perpetrators. However many agree these measures are a drop in the ocean considering the scale of fraud and the fact fraudsters seem forever one step ahead in their tech expertise.
"That is why collaborative efforts to combat fraud are important. Anyone falling victim to fraud should report it to their bank, card issuer and the police. They, lawyers and fraud specialists will be able to advise on possible recovery action."
